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Congress Returns to Washington with Full Agenda

When Congress returns to Washington this week after its month-long recess, it will face a full agenda of legislative priorities, including responding to the devastation caused by Hurricane Harvey, enacting final FY18 spending bills, and moving forward with tax reform legislation.

Disaster Relief for Victims of Hurricane Harvey

While the full extent of the damage is unknown, experts anticipate that recovering from Hurricane Harvey may require over $100 billion in federal disaster relief funds. NLIHC is working closely with organizations on the ground, including NLIHC state-partners the Texas Low Income Housing Information Service, the Texas Homeless Network, and the Texas Association of Community Development Corporations, as well as with Texas Appleseed and others, to advocate for resources to repair or rebuild federally assisted housing developments that were damaged by flooding and to help the lowest income people who were displaced by the storm.

In recent years, some conservative members of Congress have criticized the role of the federal government in responding to natural disasters. In 2005, Vice President Mike Pence, then a Republican congressman, called for offsetting any post-Hurricane Katrina aid with budget cuts in other programs. After Superstorm Sandy destroyed much of the New York and New Jersey coastline, 179 House members and 36 Senators – including Texas Senators John Cornyn and Ted Cruz – voted against federal aid because they argued it included too much “pork and unrelated spending,” in Mr. Cruz’s words. Former Congressman Mick Mulvaney, who now serves as President Trump’s director of the Office of Management and Budget (OMB), unsuccessfully advocated to offset the cost of Sandy relief with across-the-board cuts to domestic programs.

The House is expected to vote Wednesday on an initial appropriation of $7.85 billion requested by the Trump administration to help Houston and southeast Texas recover after Hurricane Harvey. The package includes $7.4 billion for FEMA’s Disaster Relief Fund and $450 million for the Small Business Administration’s disaster loan program, designed to help individuals and small businesses begin rebuilding their homes.

At the time of this Memo to Members and Partners, House leaders have indicated that the disaster aid will not be tied to must-pass legislation to lift the debt ceiling. More conservative members of Congress, including the House Freedom Caucus, have resisted combining Harvey relief funds with other bills, calling instead for deep spending cuts and reforms alongside any legislation to lift the debt ceiling.

The Senate could combine Harvey disaster relief with a bill to lift the debt ceiling and send the combined package back to the House for approval. Such a bill would likely garner broad bipartisan support, despite opposition from the Freedom Caucus, and would be signed by the president. "The president and I believe that [debt ceiling legislation] should be tied to the Harvey funding, that our first priority is to make sure that the state gets money,” stated Treasury Secretary Steven Mnuchin. “It is critical and to do that, we need to make sure we raise the debt limit.”

Texas Governor Greg Abbott described the disaster aid package as an important initial “down payment” on Harvey relief that he expects will come to $150 billion to $180 billion. “We need Congress to step up and pass this and help Texas rebuild,” he said.

An additional $5 billion to $8 billion for Harvey could be included in a catch-all spending bill Congress must pass to fund the government after the new fiscal year begins on October 1, with a more robust package to be enacted at a later date.

NLIHC will advocate with leaders on Capitol Hill and in the Administration to ensure sufficient federal funding is allocated to support the needs of those impacted by Harvey, particularly those with the lowest incomes.

FY 2018 Spending Bills

Congress has until October 1, when the new fiscal year begins, to enact final FY18 spending bills or a short-term funding measure, known as a Continuing Resolution, to avert a partial federal government shutdown.

House leaders are moving quickly to pass all twelve spending bills. In July, the House passed four security-related spending bills, and this week they will vote on the eight remaining bills – including funding for affordable housing and community development programs – as part of one large “megabus” measure. Dozens of amendments have been filed, but it is unclear which ones will receive a vote. Representative Paul Gosar (R-AZ) has withdrawn a harmful amendment that would have prevented HUD from implementing its Affirmatively Furthering Fair Housing rule, undermining federal fair housing law and housing choice. NLIHC opposes an amendment offered by Representative Steve Stivers (R-OH) that would shift funding away from private fair housing enforcement. NLIHC will continue to track all amendments and will keep advocates updated.

The House and Senate spending bills take very different approaches to funding affordable housing and community development programs. Under the House bill, more than 140,000 housing vouchers that families are expected to use next year would be lost. Without housing assistance, families are at immediate risk of eviction and, in worst cases, homelessness. The House bill also reduces flexible resources used by states and localities to build and preserve affordable housing and address community needs. The bill undermines public-private partnerships that provide affordable homes for low income people, and it cuts funding used to keep families healthy and safe by removing lead and other harmful toxins from their homes.

The Senate bill rejects the spending cuts proposed in the House version and provides an increase in resources for affordable housing. While the House set overall spending limits for domestic programs at $3 billion below the already tight Budget Control Act (BCA) spending caps, the Senate agreed to write their spending bills at FY17 levels, which exceed the BCA caps. This agreement allowed the Senate Appropriations Committee to allocate $8 billion more than the House bill overall and $1.4 billion more than the current year to HUD. This level of funding for HUD is a direct result of strong advocacy by residents and affordable housing organizations throughout the country and the efforts of Congressional champions of affordable housing led by Subcommittee Chair Susan Collins (R-ME) and Ranking Member Jack Reed (D-RI).

NLIHC and other advocates are concerned, however, that despite the increase in funding, the Senate bill may still not provide enough cover the full extent of inflationary costs, putting 60,000 vouchers at risk.

It is imperative that Congress reach a budget deal to lift the harmful spending caps and to fully fund affordable housing to ensure that no housing vouchers are lost, that public housing is maintained, and that other critical programs are protected.

Tax Reform

Once the House passes its spending bills, it will turn its attention to tax reform legislation, a top priority for Republicans in Congress and the White House. Party leaders have set an ambitious goal of enacting tax reform legislation before the end of the year.

In recent weeks, the White House has discussed possible reforms to the mortgage interest deduction (MID), a $70 billion tax expenditure that disproportionately benefits higher income homeowners. The administration is considering capping the tax deduction at the first $500,000 of a mortgage rather than the first $1 million, the current threshold - a change that aligns with one of the proposals of the NLIHC-led United for Homes campaign.

While NLIHC and United for Homes call for reinvesting the significant savings from MID reform into affordable rental homes for people with the greatest needs, through solutions like the national Housing Trust Fund or rental assistance, the administration and Congressional Republicans propose using any savings to offset the cost of lowering tax rates for millionaires and corporations.

It is critical that any tax reform legislation keep housing dollars within housing and reinvest savings from MID reform into programs that address the growing rental housing crisis for those with the lowest incomes. NLIHC encourages advocates to call their members of Congress in support of the United for Homes proposal to help end homelessness and housing poverty in America.